<h1>Central bank holds rates, signals possible easing; permits INR lending to neighbors, expands Vostro investments, sets reference rates</h1> The central bank kept policy rates unchanged and maintained a neutral stance after a unanimous monetary policy committee vote, signaling possible easing ahead to counter external tariff risks and domestic shocks. Concurrently it issued regulatory measures permitting Indian-rupee lending by banks to non-residents of certain neighboring countries for bilateral trade, expanded permissible investments of Special Rupee Vostro Account balances to include corporate bonds and commercial paper, and proposed transparent reference rates for major trading-partner currencies to facilitate INR settlements. These steps aim to promote rupee-based cross-border transactions and reduce reliance on the US dollar, affecting foreign exchange and capital flow frameworks under applicable RBI/FEMA rules.